The Economist forecasts the Dominican economy will grow 5.3% in 2021. The Economists points to moderation in government spending, lower inflation, and the confidence investors have in the Abinader government as reasons for the fast recovery. The research unit of the British publication reports that it expects consumer spending and strong demand for Dominican goods and services from the United States to stimulate the economy.
The March report of The Economist mentions the Abinader administration expects to reduce the fiscal deficit to 4.6% of GDP in 2021, compared to the 7.9% estimated for 2020. This will be possible thanks to the moderation of spending and the partial recovery of revenues to the pre-pandemic levels, states the report.
The publication highlights the role the outstanding level of Central Bank international reserves (US$11.96 billion as of February 2021) and remittances from Dominicans living abroad to maintain the stability of the exchange rate will play in the recovery. The publication also highlights the aggressive vaccination campaign underway in the Dominican Republic as one of the reasons for its forecast for outstanding economic recovery. This is contributing to the tourism industry recovery.
The Economist expects inflation to keep to the 3-5% levels forecast by the Central Bank.
The Economist forecasts that the Dominican economy’s outlook in 2021 will be marked by frequent government interventions to maintain consumer spending and investor confidence.
Political stability will improve in 2021 because President Abinader’s administration has benefited from having spearheaded well-received anti-corruption and good governance initiatives, says The Economist.
It also values the fulfillment of the head of state’s promises to provide pensions to sugar cane workers, increased numbers of citizens insured by the National Health Insurance (Senasa) and improvements aimed at transparency in bureaucratic processes.
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El Dia:
19 March 2021